NYCB acquires balance of Peter B. Cannell &amp; Co.

WESTBURY – Continuing a nearly two-year acquisition spree, New York Community Bancorp Inc. has signed an agreement to buy the remaining 53 percent of Manhattan-based asset management firm Peter B. Cannell & Co Inc. for an undisclosed sum.

The Westbury-based banking company had acquired a 47 percent stake in Peter B. Cannell & Co. as part of its merger earlier this year with Richmond County Financial Corp.

Peter B. Cannell, which manages about $650 million in assets, will become a subsidiary of NYCB, which controls about $8.9 billion in assets and operates 119 branches.

The bank announced the deal Dec. 21 and said it had received all required regulatory approvals.

The deal, which is expected to close next month, will give NYCB a branded asset management arm, setting the bank apart from a wide range of local competitors, analysts said.

"That kind of sets New York Community off in a different class," said James Ackor, an analyst with Boston-based Tucker Anthony Sutro Capital Markets. "They’ve got a platform they can expand upon. It’s profitable, albeit small."

NYCB CEO Joseph R. Ficalora in a written statement noted the bank’s stake in Peter B. Cannell had already proved to be "a highly beneficial one for our companies and for our investors." He added it has "generated significant fee income and investment returns."

Building the bank’s fee-based income, Ackor said, will free it a little bit from the tyranny of interest rates. "Peter B. Cannell isn’t going to have a huge impact on New York Community or its earnings," he added. "But it is a source of fee revenues. To the extent that banks and thrifts are looking for sources of fee-based revenues to diversify, we view it as a positive."

The deal is the third acquisition by the bank in two years. While by far the smallest, it is the first to take it beyond the scope of traditional banking.

In 1999, the predecessor to NYCB acquired Westbury-based Haven Bancorp Inc., giving it more than 60 supermarket-based branches. In July, it merged with Richmond County Financial, which has a strong presence in Staten Island and New Jersey.

Ackor said NYCB could use its branches to promote Peter B. Cannell, though he noted that the service wouldn’t necessarily be easy to market. "It’s not going to be an easy cross-sell," Ackor said.

In the midst of its acquisitions, NYCB has been shedding assets. The company recently said it was selling seven supermarket branches to The Trust Company of New Jersey. That deal, slated to close in the second quarter, includes branches acquired through the Haven Bancorp takeover, which closed on Nov. 30, 2000.

"They were able to figure out which branches make sense," Ackor said. "Seven out of 60-something is not a big deal. They’re looking at the profitability of every branch."

NYCB plans to open three more branches in Staten Island by the end of the first quarter, raising its presence in that borough to 23 branches.